DRAM, however, is not a design-house game in which one can stay fabless. DRAM is capital-devouring, IP-fortified, and manufacturing-bound, and by 2016 the whole industry was dominated by three survivors, Samsung, SK Hynix, and Micron, fortified by four decades of patents and capital that no newcomer had breached
CXMT leaders once publicly claimed that they obtained roughly 2.8 TB of Qimonda technical documentation, which became the basis for CXMT’s DRAM business.
Having led DRAM development for two decades, Kuesters could tell CXMT’s engineers which of Qimonda’s design choices to keep and which to discard, and how to move a cell that worked only in the lab into volume production, the integration and yield judgments that no patent records.
Ping Er-xuan, CXMT’s VP for future-technology assessment and the public face of its roadmap (the “46nm to the 10nm class” framing), came not from Qimonda but from a US career at Micron, SanDisk, and Applied Materials, where he ran memory and materials technologies. Ping brought process-and-materials depth and an emerging-memory view: individual mobility.
The Qimonda patents were always a finite, expiring asset. What lets CXMT keep moving, from G4 to G5 and now into HBM, is the assembled capability of domestic talent, Chinese nationals who worked at foreign companies and returned, as well as some experts from foreign firms, not the documents.
The Hefei government helped CXMT build a local supply chain around its fab. Hefei’s playbook is to take a large equity stake in an anchor “link-leader” and then draw the rest of the chain in around it.
Unlike a private venture-capital fund answerable to LPs that expect a return on a fixed timetable, Hefei’s state-venture capital, ultimately backed by the city’s municipal and development-zone state entities, faced no such clock. They kept funding a company that, even after turning its first annual profit in 2025, still carried an accumulated deficit of roughly RMB 36.65 billion built up over nearly a decade.
That willingness to treat a fab as a decade-long bet rather than a fund-cycle return is the catalyst that the technology and the talent both depended on.
Qimonda supplied the foundation, with a licensed patent base and a cell architecture from outside the incumbent triangle. Talent supplied the motion, with key figures like Kuesters and Ping as well as the returnees from the American majors, and the contested hires out of Korea. Those people turned a frozen blueprint into a process that could keep scaling. Then the Hefei government supplied what the other two needed but could not generate on their own: capital, patience, and a localized supply chain. None of the three would have produced a DRAM maker alone; together they did.
Overall, CXMT is clearly the fourth biggest DRAM maker globally by almost every metrics while expanding its lead over legacy memory suppliers. For the full year, CXMT revenue increased 156% YoY to ~$8.6 billion, up from ~$3.3 billion in 2024 and ~$1.2 billion in 2023.
CXMT’s FY25 gross margin reached 37.8%, moving closer to Samsung at 39.4% and Micron at 39.8%. However, it remains far below SK Hynix at 60.4%, as SK Hynix benefits from a much higher HBM mix, which carries higher ASPs and margin last year. CXMT’s ~38% margin is a significant swing from -113% in FY23 and -4.7% in FY24. Last year is not only the year CXMT reaches a record-high gross margin, but also the first year that the company achieves a positive margin profile.
Die stacking is not a challenge unique to CXMT. Even leading memory suppliers are encountering difficulties. For 12-high HBM4, we understand that suppliers continue to face significant stacking-related issues, including die cracking, thermal management challenges, and yield loss.
We think only Huawei, Cambricon, and select emerging Chinese AI chip startups are likely to adopt CXMT’s HBM, though we suspect adoption rates will be large. We actually believe domestic AI accelerator vendors would still prefer foreign HBM3, or even HBM3E, if they can secure supply through any available channel or stockpiled inventory before the export controls in December 2024.
At RMB2.78, CXMT would be valued at about RMB197 billion, or $27 billion, equivalent to just 1.8 times annualized first-half 2026 parent earnings. This arithmetic floor sits well below a realistic book-building valuation. This is too cheap and should be much higher valuation in our opinion.
Of the RMB29.5 billion in planned net proceeds, RMB20.5 billion, or 69.5%, funds wafer-production-line and DRAM technology upgrades, while RMB9 billion, or 30.5%, supports forward-looking DRAM research. The prospectus discloses no dedicated HBM project and does not mention HBM.